Sterling Bay principals Andy Gloor and Chang Lee did not respond to requests for comment. Jeff Bucaro, a director at HFF, declined to comment.

The Ace is one of the few properties the Chicago-based developer has looked to sell in Fulton Market, the neighborhood on the northwestern edge of the West Loop where Sterling Bay is one of the most active real estate investors.

Sterling Bay took on the Ace Hotel development as part of the agreement with Google for its lease just across Morgan Street, promising the technology giant it would provide hotel rooms for visiting employees and clients.

The developer bought the two-story industrial building at 311 N. Morgan for $4 million in October 2013, and took out a $41.5 million construction loan from Bank of America in February 2016, according to Cook County property records.

The total cost of the project, which includes expanding the existing structure, is unknown.

Crain's reported in October 2014 that Portland, Ore.-based Ace planned a hotel on the site.

The City Council in April 2015 voted to approve shifting a 5,000-square-foot parcel at Fulton Market and Morgan Street out of a planned manufacturing district. The zoning change allowed Sterling Bay to build part of the hotel in a former PMD, where hotels are among prohibited uses.